Australia's relationship with Indonesia has always been defined by our neighbour being poorer and weaker than us. 

But what would happen if that relationship was flipped? That is the subject of a talk by Professor Hugh White at ANU tonight.

Professor White said economists have predicted that by 2040 Indonesia could have the fourth largest economy in the world, becoming one of Asia's great powers. He says that means Australia needs to decide what relationship we want with our near neighbour now.

"Wealth is the deepest source of national power. If Indonesia's economy grows over coming decades, it will become much more powerful in many other ways as well," Professor White said.

"It will start to play a much bigger role in wider Asian strategic affairs than it has so far. As the hold of power shifts from Australia to Indonesia, our bilateral relationship will change fundamentally, and Australia's political and strategic circumstances will shift sharply.

"Australia's outlook on the world has always been profoundly affected by the simple fact that all our close neighbours have been poorer and weaker than us. We have never had to deal with a neighbour who was our equal in power, let alone one that far exceeded our strategic weight.

"Now we have to work out how to get on with a bigger power - perhaps even a great power - right next door. We need to ask ourselves what kind of relationship we will want to have with Indonesia when its economy is at least two or three times the size of ours, and what we can do now to start building it."

Hugh White is Professor of Strategic Studies at The Australian National University and a Visiting Fellow at the Lowy Institute for International Policy. The talk forms part of the Vice-Chancellor's Public Lecture series for 2012.